531 S.W.3d 254
Tex. App.2017Background
- VTI manufactures industrial valves; Cooper competes in severe-service metal-seated ball valves. Barry Hoeffner worked for VTI (1997–2000; rehired 2001–2016) and signed a 1997 agreement (confidentiality + two‑year noncompete and nonsolicit provisions) and a 2001 confidentiality agreement (no new noncompete).
- Hoeffner left VTI in 2000, worked elsewhere ~18 months, then was rehired in 2001; VTI did not hold his job open or treat the 2000 departure as a leave of absence.
- In 2015–2016 Hoeffner negotiated to become Cooper’s president, disclosed some VTI financial/customer information during negotiations, and after joining Cooper contacted multiple VTI customers/specifiers.
- VTI sued Hoeffner and Cooper alleging misappropriation of trade secrets and breach of the agreements and obtained a temporary injunction after a three-day hearing; the injunction broadly defined “Confidential and Trade Secret Information” and imposed multiple restraints (including prohibitions on designing certain valves, using specified customer lists, and soliciting employees).
- On accelerated interlocutory appeal, appellants challenged the injunction as based on expired/unenforceable covenants, and as overbroad and vague in violation of Tex. R. Civ. P. 683.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of 1997 two‑year noncompete | The 1997 covenant remains binding / was reinstated when Hoeffner returned | The two‑year noncompete expired in 2002; any oral reinstatement is barred by integration and statute of frauds | Noncompete expired in 2002 and is unenforceable; oral reinstatement unenforceable under statute of frauds and writing requirement; injunction provisions based on it reversed |
| Enforceability of 1997 nonsolicit provisions | They protect VTI’s customer/employee relationships broadly | Nonsolicit clauses lack time, geographic, and scope limits and are thus unreasonable under Covenants Not to Compete Act | Nonsolicit provisions are overbroad/unenforceable; related injunction provisions reversed |
| Scope and specificity of trade‑secret injunction (Rule 683) | VTI’s injunction definition reasonably protects its trade secrets, including customer lists and margins | Definition is open‑ended; injunction prohibits use of nonconfidential information and preexisting Cooper clients; Exhibits list >1,800 entities not shown to be secret | Section (b) is vague and overbroad under Rule 683; cannot enjoin possession/use of blanket customer lists; section reversed |
| Evidence of misappropriation/threatened disclosure | Evidence supports probable right and imminent harm (e.g., disclosures during negotiations, contacts with customers) | Appellants argue lack of possession/use of VTI confidential information | Court found record supports trade‑secret claims in part, but injunction must be narrowed to meet Rule 683; appellate court did not disturb existence of viable trade‑secret claims but reversed overbroad provisions |
Key Cases Cited
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (purpose of temporary injunction is to preserve the status quo and standards for injunctive relief)
- Marsh USA, Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011) (employee noncompetes and nonsolicits governed by the Covenants Not to Compete Act; enforceability depends on reasonableness)
- Helix Energy Solutions Group, Inc. v. Howard, 452 S.W.3d 40 (Tex. App.—Houston [14th Dist.] 2014) (temporary injunctions must comply with Rule 683; noncompliant orders may be void and dissolved)